In a complaint filed in a Illinois Circuit Court, iPCS alleged
that Sprint's deal with Clearwire violates its exclusive right to
sell service in certain geographic areas. iPCS wants the court to
prevent Sprint and Clearwire from closing their deal until it
accounts for iPCS's exclusivity rights.

Sprint and iPCS are no strangers in court: They've been in legal
battle for three years, mainly regarding iPCS's exclusivity
rights. Because of this, Sprint had already asked a Delaware
court for a "Declaratory Judgment that Sprint's affiliate
agreements with iPCS in no way prevent the operation of the new
Clearwire in iPCS territory," a Sprint rep said by email. "This
latest action by iPCS is simply a response to our request," he
said.

iPCS, meanwhile, says Sprint is trying to evade an Illinois
judgment that requires Sprint to "cease owning, operating and
managing the Nextel network in iPCS Wireless's territory," in a
release (PDF).

Tiny iPCS has about 640,000 wireless subscribers in seven states
in and around the Midwest. The conventional wisdom is that
someday Sprint will buy iPCS (market cap $495 million) in a
tuck-in acquisition. So far, no deal, but the market is excited
today: iPCS shares are up 6.5% on the news of the suit. Sprint
shares, meanwhile, are down 2.3% after
reporting lousy Q1 earnings this morning.